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And the WORD for Today is:
Down Payment – refers to the amount of money needed to cover the difference between what a borrower agrees to pay for a home and the amount of the mortgage they will have. The down payment on conventional loans is typically 20% of the sales price. The real estate crisis which currently exists in the United States is partly due to home purchase with little (3%) or no (0%) as a down payment. When the borrower has made little or no down payment they have limited risk if there is a default AND the property will usually be difficult to sell should their financial circumstances change. Not only does the lender assume greater risk, but the borrower has less incentive to struggle through the difficulty.
Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.
You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.
(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)
Down Payment – refers to the amount of money needed to cover the difference between what a borrower agrees to pay for a home and the amount of the mortgage they will have. The down payment on conventional loans is typically 20% of the sales price. The real estate crisis which currently exists in the United States is partly due to home purchase with little (3%) or no (0%) as a down payment. When the borrower has made little or no down payment they have limited risk if there is a default AND the property will usually be difficult to sell should their financial circumstances change. Not only does the lender assume greater risk, but the borrower has less incentive to struggle through the difficulty.
Copyright © 2008, Home Ownership Matters, LLC. All Rights Reserved.
You can find more helpful definitions of WORDS like these in Your Real Estate Advisor which can be purchased at www.DovePublishingHouse.com.
(Please E-mail Heather at homeownershipmatters@gmail.com with any questions, comments or concerns you might have! We appreciate all comments and feedback, so please don't be shy.)
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